Apple unveils thinner, more powerful iPhone 5

Apple on Wednesday introduced its new iPhone 5, a lighter, thinner and more powerful version of its iconic mobile device. Apple chief executive Tim Cook called the launch "the biggest thing to happen to iPhone since the iPhone." Tell us what you think about Apple's new products | How iPhone became King of smartphones

Apple on Wednesday introduced its new iPhone 5, a lighter, thinner and more powerful version of its iconic mobile device.

Apple chief executive Tim Cook called the launch "the biggest thing to happen to iPhone since the iPhone."

At a packed launch event in San Francisco, Apple marketing chief Phil Schiller said of the new iPhone: "It is an absolute jewel. The software and engineering that went into this product is the most challenging our team has ever taken on."

The introduction has been among the most keenly anticipated in the tech world, with rumors and leaks over several months about the new device from the biggest company in the sector. How iPhone became King of smartphones

Phil Schiller said pre-orders would begin on Friday and shipments would start a week later in the United States, Canada, Britain, France, Germany, Australia and Japan.

Schiller said US pricing would be the same as for the prior version of the iPhone, starting at $199 and increasing to $399 with increased memory.

He said shipments would start later in September in 20 additional countries and that the phone would be in 100 countries by the end of the year.

"It is the thinnest iPhone we have ever made, it's the world's thinnest smartphone and weighs just 112 grams," just under four ounces, Schiller said.

"It is 20% lighter than the iPhone 4S."

Schiller said the new, taller iPhone, made of glass and aluminum, features a new design to nestle in one's palm to naturally align with thumbs and works on the faster mobile Internet networks known as LTE.

"When you carry your phone it should fit beautifully in your hand, that is just how we designed iPhone 5," he said.

"Everything you do looks gorgeous on this beautiful widescreen display," he said, describing the so-called Retina high-definition four-inch (10 centimeter) display used on other Apple devices.

Analysts expect Apple to sell tens of millions of the new iPhone in the coming months, luring in smartphone buyers who have been waiting to upgrade.

"This iPhone 5 will turn out to be Apple's biggest home run yet. This will be the biggest and most successful Apple iPhone launch so far," independent analyst Jeff Kagan said.

Morgan Stanley analyst Katy Huberty said it is possible Apple may ship between 48 million and 53 million iPhones in the fourth quarter and "up to 266 million" in 2013.

She said the company could sell eight to 10 million in the third quarter, or in just the opening days it becomes available.

Apple has fierce customer loyalty and has been rapidly gaining users, but has lost market share to the faster-growing segment of smartphones powered by Google's Android operating system.

Apple's iPhone 5 showing 3D maps. Reuters Photos

Smartphones powered by Android software continued to dominate with 52.2% of the US market in the past months, but Apple's iOS was the second most popular smartphone platform with 33.4%, comScore reported.

Samsung mobile phones remained the most popular in the United States with 25.6% of the market, but third-place Apple gained ground to claim 16.3% as of the end of July, according to comScore.

Apple is engaged in litigation with Samsung over patent infringement and is seeking to ban US sales of some Samsung devices after a major court victory in California in August. Apple iPhone 5: Top 5 rumours

Nicholas Carlson of the website Business Insider said the new iPhone launch represents "the most pivotal moment" for the sector.

"Companies that are, collectively, worth a trillion dollars -- Samsung, Google, Amazon, Microsoft and more -- have bet billions of dollars building competitors to the iPhone," he said.

"Today, they find out if Apple has once again leapt way ahead of them, or if finally, the battleground is growing even."

iPhone vs SamsungThe release is expected to help Apple recapture attention and revenue after it lost the lead in smartphones to Samsung in 2012.

Apple's announcements were largely in line with investor expectations, and their response was tepid. Apple shares rose $5.13, or 0.8 percent, to $665.72 in afternoon trading.

Shares have jumped as expectations rose for the iPhone 5, rallying 16 percent since Apple's latest earnings report in July.

The bigger screen moves Apple somewhat closer to competing smartphones, but the iPhone is still small compared to its main rivals. Samsung has increased the screen size of its flagship phone line every year, and it's now about 45 percent larger than the one on the new iPhone.

The new iPhone is lighter than Samsung's new Galaxy S III. Schiller said the screen is 18 percent thinner and 20 percent lighter because of new technology that eliminates a separate touch-sensing layer in the screen. The new phone is made entirely of glass and aluminium.

Apple's iPhone 5 and Samsung Galaxy SIII. Reuters and AFP Photos

The iPhone 5 will also come with the capability to connect to the fastest new wireless data networks, both in the US and overseas. That's another feature that was widely expected.

Sales of Apple's iPhones are still strong. Samsung Electronics Co. benefited from having its Galaxy S III out in the U.S. in June, while Apple was still selling an iPhone model it released last October.

Amid expectations of a new iPhone, Amazon, Nokia and Motorola all tried to generate interest in their products last week, hoping that a head start on the buzz will translate into stronger sales.

Makers of consumer electronics also are refreshing their products for the holiday shopping season.

One big changeThe new iPhone is getting a new connector to attach to computers and chargers. It had been using the same one from the iPod. Schiller said the old connector has "served us well for nearly a decade, but so much has changed."

That means the new iPhone won't be compatible with old accessories, though Schiller said accessory makers are already working to update their products. Apple will sell an adapter to work with older accessories.

Also as expected, Apple is releasing a new version of its phone software, iOS 6. It will have a new mapping software, as Apple ditches the one from Google it had been using.

The new software will have turn-by-turn voice navagation - a feature Google had limited to Android versions of its mapping app.

Apple said the phone's virtual assistant, Siri, will be giving the directions.

Apple also announced a new iPod Touch model that brings over the changes applied to the iPhone 5, including the bigger screen and smaller connection port.

The new iPod Nano with multi-touch screens is introduced during Apple Inc.'s iPhone media event in San Francisco, California. Reuters Photo

For the first time, Apple's voice-controlled personal assistant software, Siri, will be available on the iPod.

Apple is also updating its iTunes software for the Mac and PC, with what is says is a "dramatically simpler and cleaner interface." It will be available as a free download in October.

In another audio-related update, the white earbuds that ship with all of Apple's portable devices are getting an update. Now called "earpods," they're tube-shaped, which Apple said will help fit the shape of the ear.

They'll go on sale on Wednesday as a stand-alone accessory but will be included free with new devices out in October.

Apple is widely expected to launch a smaller version of its market-leading iPad tablet computer later in 2012.